Our information is provided free of charge and will be useful for a large number of companies established in the United Kingdom (gov.uk/business) and Quebec (infoentrepreneurs.org). Due to its general nature, the information cannot be considered exhaustive and should never be used as a substitute for legal or professional advice. We cannot guarantee that the information applies to the individual circumstances of your business. Despite our efforts, it is possible that some information is outdated. You should consider hiring your employees and keep in mind that people may feel threatened by a joint venture. It can also be difficult to establish effective working relationships if your partner has a different way of doing things. You can benefit from a survey about your own business. Be realistic about your strengths and weaknesses – consider conducting a SWOT (strengths, weaknesses, opportunities, and threats) analysis to determine if the two companies are going well together. You`ll almost certainly want to find a joint venture partner that complements the strengths and weaknesses of your own business. One of the most valuable tasks of the starting team is to challenge and, as far as possible, limit the number of interdependencies between parents and the JV.
The high-tech JV`s work teams first generated a list of more than 1,000 dependencies on a parent, who was to provide administrative services, component purchases and joint research institutes, in addition to a number of other resources. Recognizing that a heavy burden could lead to insurmountable complexity for the parent company, launcher leaders questioned virtually every position on the list. Finally, they reduced it to only 300 services that the parent company would provide in the first year and to less than ten for the second year and beyond. In some circumstances, other options may work better than a business. For example, you could establish a business partnership. You might even decide to completely merge your two companies. You might also need other agreements, for example. B a confidentiality agreement, to protect the trade secrets you disclose. Many companies believe that the fastest way to scale up with new products or skills is to buy another company or merge with another company. But everyone who has followed the path of M&A assessment knows the barriers and risks. Mergers and acquisitions often require the buyer to pay a premium of 20% to 50% above the target company`s current share price. But experience and research show that most Acquirers never get this premium back.
In contrast, a joint venture does not usually include a premium. To help you decide which form of joint venture is most appropriate for you, you need to ask yourself if you want to participate in the administration. You should also think about what could happen if the business goes wrong and how much risk you are willing to accept. Maybe you`d also want to see what other companies are doing, especially those that operate in markets similar to you. Seeing how they use joint ventures could help you choose the best approach for your business. At the same time, you can try to identify the skills they successfully apply to partners. Original documents, joint ventures and partners, © Crown copyright 2009 Source: Business Link UK (now GOV.UK/Business) Adapted to Quebec from information entrepreneurs Joint ventures are particularly popular with companies in the transport and travel sector that operate in different countries. . .